Obama considers immigration action

President Obama may be getting ready to drop a political nuclear bomb just months before the 2014 mid-term elections. The Obama administration is considering unilateral executive action on immigration—with action coming as early as next week.

President Obama has yet to receive formal recommendations on changes to immigration policy from Homeland Security Secretary Jeh Johnson, but White House lawyers are already crafting the legal rationale for unilateral executive action.

White House lawyers are likely to make the case that not only has Congress failed to fix the broken immigration system, but they also haven’t even provided the necessary resources to enforce the laws Congress has already passed on the subject. This dereliction of duty by Congress—so the argument goes—gives the president the ability to step in and prioritize which individuals here illegally should be sent home and which should be able to stay.

President Obama is said to be considering several different options, the most controversial of which, would be an expansion of the Deferred Action for Childhood Arrivals program that would result in halting the deportation of millions.

The expansion would provide blanket exemptions for not only children but also for parents and close relatives of U.S. citizens or immigrants with no criminal record.

The House already has passed legislation to block President Obama from expanding this program and, through its power of the purse, could attempt to cut off the funds that would be needed to implement the expansion.

President Obama may act despite opposition from several endangered Sen. Democrats. Red state Democrats like Sen. Mark Pryor (D-AR), Sen. Kay Hagan (R-NC) and Sen. Mary Landrieu (R-LA) could all be hurt by this move that is sure to galvanize the GOP base and all three of them have spoken out against unilateral executive action.

Federal deficit likely to rise

A new report from the Congressional Budget Office (CBO) warns that the federal deficit is likely to increase dramatically over the next 10 years—more than doubling to $960 billion by 2024, forcing higher federal spending on interest payments and limiting lawmakers' flexibility to deal with fiscal challenges.

CBO warns that, “[s]uch high and rising debt would have serious negative consequences for both the economy and the federal budget.”

The CBO report cites an increase in Social Security spending for an aging population, the expansion of federal healthcare subsidies and the growing interest payments on the debt as the prime drivers of this projected increase in the federal deficit.

These increased deficit projections come despite the fact that the federal deficit has actually decreased this year by roughly $170 billion.

In fact, this year's deficit—at 2.9 percent of the gross domestic product—will be slightly below the average of the past 40 years; this is the fifth consecutive year in which the deficit has declined as a percentage of the gross domestic product since peaking at 9.8 percent in 2009.

At the same time, however, the debt held by the public will increase for the seventh year in a row, reaching 74 percent of GDP—the highest ratio since 1950. And according to CBO, federal debt under existing spending policies will rise to 77 percent of GDP by 2024, roughly twice the 39 percent average of the past four decades.

House Republicans nearing deal on terrorism insurance

In July, the Senate – by a vote of 93 to 4 – reauthorized the terrorism risk insurance program that was initially enacted after the Sept.11 terror attacks. Despite the overwhelmingly bipartisan vote in the Senate, House conservatives have sought additional changes to the program that they say will protect taxpayers.

Now it appears that House Republicans are close to a deal that would raise the threshold at which the federal cost-sharing program for insurance would kick in at $250 million in damages from a terrorist strike, according to House GOP leadership and other sources. The Senate-passed version maintains the existing $100 million threshold.

It remains to be seen if this compromise legislation will be able to quell conservative concerns over the bill. House Financial Services Chairman Jeb Hensarling (R-TX) has proposed raising the trigger to $500 million.

Such a dramatic increase in the threshold, however, is unlikely to pass in the House because a combination of Democrats and House Republicans, mostly from the New York City region and other urban areas whose districts contain more potential terrorist targets, would be enough to block that measure.

In addition to the new potential compromise legislation, there has also been talk of a potential six-month extension of the current program, kicking a final reauthorization to a new Congress.

But it's not clear that could pass the Senate and outside groups from the insurance, business, construction, and manufacturing sectors are getting antsy. It was these groups that combined after Sept. 11 to push for initial enactment of the Terrorism Risk Insurance Program in 2002 to help provide continued coverage in high-risk areas for such things as commercial buildings and stadiums.

With Democratic buy-in, there appears to be little doubt such a compromise could pass the House.

Still, a remaining complication is a lack of appetite for any move that might appear to publicly roll over Hensarling and other conservatives—especially prior to upcoming internal House GOP leadership elections, to be held in November.

A brewing battle over another issue—opposition by Hensarling and other conservatives to renewing the Export-Import Bank's charter without major changes—only further adds to the political sensitivity.

One hope is that a compromise of setting $250 million as the threshold for the terrorism insurance renewal can be sold in the next weeks to conservatives, in a way designed to avoid handing them an embarrassing defeat. Even if it is not the exact approach they want, it is less than what the Senate has passed, and could be pitched to them as a victory in that regard.

Transportation in focus

Uber investigation

Uber has been the darling of Republicans and Democrats, but its cutthroat campaign against one of its competitors may make the company the subject of state and federal investigations.

The company has reportedly equipped an army of independent contractors with burner phones and credit cards as part of an effort to undermine its competitor Lyft and poach drivers, according to an article published by The Verge this week.

The San Francisco start-up's aggressive recruitment methods are already well documented, but the size and sophistication of its exploits revealed by The Verge could warrant an antitrust investigation by the Federal Trade Commission or state attorneys general.

A former FTC official, who spoke on the condition of anonymity, said that reports of Uber's misrepresentation aligns strongly with similar antitrust investigations the agency has conducted in the past.

"The heart of what's offensive here, the indispensable ingredient, is the canceled orders," the official said. "That kind of behavior would be seen as having no redeeming benefits at all, poses competitive burdens, and falls within the conception of unfair competition."

Uber stands accused of employing street teams of contractors to disrupt Lyft's launch plans in New York City who were handed "two Uber-branded iPhones and a series of valid credit-card numbers to be used for creating dummy Lyft accounts." Uber has also allegedly made a habit of ordering Lyft rides and canceling them to avoid detection, a method that would prompt rival drivers to waste time driving to the pickup spot. Lyft contends Uber has caused thousands of canceled rides, something Uber denies was done intentionally.

Uber, which now boasts a presence in more than 160 cities around the world, is confronting a new wave of scrutiny just a week after hiring former Obama campaign wizard David Plouffe to lead its policy team.

The company's success, size and influence are likely to increase the chances of triggering either a regulatory investigation or private litigation, said Richard Feinstein, former director of the FTC's antitrust enforcement.

The FTC has historically been an ally to the booming app-driven ride-sharing industry. In April, the agency wrote a letter articulating its belief that regulations should be limited to safety and consumer protection and not for the purposes of levying higher license fees than those placed on traditional taxi fleets.

Political bits

House

Arizona 1st Congressional District: With 100 percent of precincts reporting, state House Speaker Andy Tobin (R-AZ) leads rancher Gary Kiehne (R-AZ) by 469 votes in the GOP primary. With thousands of early ballots and provisional ballots yet to be counted, the race is still too close to call, and it could be days before a winner is declared.

Arizona 7th Congressional District: Ruben Gallego (D-AZ) defeated Mary Rose Wilcox (D-AZ) in the Democratic primary and will likely take over this open seat in November.

Oklahoma 5th Congressional District: Former state Sen. Steve Russell (R-OK) won handily in the 5th District, earning 59 percent of the GOP primary vote; he will face state Sen. Al McAffrey (D-OK), who won the Democratic primary.

Oklahoma: State Sen. Connie Johnson (D-OK) cruised to victory in the Democratic runoff for the unexpired term of Sen. Tom Coburn (R-OK), and will square off against Rep. James Lankford (R-OK) in the fall.

Pennsylvania: According to a new Franklin & Marshall College poll of registered voters, conducted Aug. 18-25, businessman Tom Wolf (D-PA) leads Gov. Tom Corbett (R-PA) 49 to 24 percent. In a late June poll, Wolf led 47 to 25 percent.

Wisconsin: Mary Burke (D-WI) is up three points on Gov. Scott Walker (R-WI), 49 to 46 percent, according to a Marquette University Law School poll.

A look ahead

The House and Senate are not in session next week.

Washington by the numbers

$11.4 billion – Value of Burger King’s merger with Tim Horton’s.

They said what?

“Anything's now possible. So if you were to say the Ebola virus has now entered (the country), I don't think anyone would be surprised.” -- Arizona state House Speaker and congressional candidate Andy Tobin, on the immigration crisis (Tucson Weekly)

Washington humor

"Disneyworld has become a popular location for Republican fundraisers. A favorite activity is to ride through It's a Small World and deport most of the dolls." –Conan O'Brien

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